Oaktree Specialty Lending (OSCL), a business development company (BDC) that provides credit solutions to middle-market companies, has faced rising challenges with an increasing number of troubled investments. Non-accrual loans, where borrowers have stopped making interest payments, now represent 5.7% of the firm’s portfolio, up from 2.7% in the previous quarter, contributing to write-downs totaling $182 million over two years. This has eroded around 10% of the company’s net asset value, and the payout ratio has risen to almost 100%, putting the dividend at risk. Given the firm’s history of dividend cuts during challenging periods, Oaktree’s dividend can be considered unsafe, investors face a potential double-digit cut if conditions worsen. As a result, on September 11, 2024, I decided to sell my position in Oaktree and increase positions in Ares Capital (ARCC), Capital Southwest (CSWC), and Starwood Property Trust (STWD) for more stability.